Youre hiring a new employee and want to do your due diligence to learn what you can about the person. But how much do you really need to uncover? Experts say that depends on the position, including the degree of responsibility and the sensitivity of what theyll be handling.

Whether to do a background check versus a reference check on that person is a question you need to ask yourself. Here are some insights to help with that decision.

Weighing Your Options

First of all, whats the bottom-line difference between a reference check and a background check?

A reference check is conducted with a previous employer to confirm the potential employees work experience, how much they were paid, their attendance record, if they got along with their colleagues, why they left the job  that sort of thing.

But dont expect to learn a great deal.

Reference checks are a bit difficult because everybody is afraid of what the consequences might be, says Albert Overman, an attorney and a consultant for the Louisiana Small Business Development Center and owner of Overman Consulting in theNew Orleans area. Often, a previous employer is not going to give you anything other than very bare information, in order to protect themselves from litigation.

Another thing you need to remember, Overman points out, is that nobody is going to send you to a reference unless they expect to get a good one.

Its also important to keep in mind that you cant ask just anything. You can only use information thats relevant to the job theyll be doing, says Kellie Boysen, owner of Alternative HR, a human resource consulting and outsourcing organization in York, PA.

What youre not allowed to ask are any questions that could result in discriminatory hiring practices, Overman says. So, for example, you cant ask how old somebody is or their race or color. And I wouldnt ask any health-status questions, or any questions that might be a way to determine whether a woman is pregnant or expects to be pregnant.

Overman says that youre probably going to learn more about a potential employee in your own interview with the person than you will through the reference check. So prepare well for those interviews; get to know the person as best you can.

Digging Deeper

Perhaps now youve gotten as much information as you require. Quite often, though, you need more. For positions in which the employee will be responsible for your products or services, its a good idea to do a thorough background check in addition to that reference check.

I recommend both, as they each provide different pieces of information that would be helpful in making a good hiring decision, Boysen says. Hiring someone is an investment of time and money, which can add up if poor hiring decisions are made, especially if you end up hiring someone who causes you liability in a criminal way.

DIY background checks may be as cursory as Google searches and LinkedIn or Twitter perusals. But professional firms dig much deeper. A thorough check is intended primarily to reveal criminal offenses, but often renders much more. Many investigative firms, says Overman, have access to incredible databases  more data than you could have imagined was available to them. Its just a matter of how much you want and how much youre willing to pay.

Find the Right Firm

Raj Tumber, a Las Vegasbased SCORE counselor, cautions that you should be careful about who you hire to conduct a background check. There are a lot of services available online  most of which, he says, dont really get the job done.

Avoid the online services that charge you $2.95 per person or $10 a month for unlimited background checks, he says. What you want to do for a pre-employment background check is to work with a company that has gone through Fair Credit Reporting Act compliance. These are the companies I would deal with.

Tumber offers an example of why this is important: When you have somebody come back with a hit  and by that I mean, lets say, any kind of criminal activity, maybe two years ago  you cant just tell the person, Well, we cant hire you because this came up.

Perhaps the person had a misdemeanor on their record but served probation and the offense has since been expunged, but the database youve used hasnt been updated. They may say, Wait a minute, thats not right, this has been cleared up, he says. So theres conflict there, and they can come back and sue you.

What you want to do is cross-verify the results youve received. Most online services cant do that, Tumber says. But if you look into any major investigation services out there, they all recommend a cross-verification check. The service is usually included in their fee.

To find a reputable firm, he recommends that you Google the keywords pre-employment background checks. Read carefully what they have to offer, then call and find out more. Theyll have customer service to help you go through the process correctly, Tumber says, because theyre responsible for you doing it right or wrong.

Taylor Sisk is a North Carolinabased journalist, video producer and documentary filmmaker. He is the founder of Past Forward, a business that assists with personal memoirs and organizational histories. Organizations for which hes written and edited content include the Social Science Research Council, the Drug Policy Alliance and the National Undersea Research Program.

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